From VOA

Been there. Done that.

Many Africans say they feel Greece’s pain, a reminder, they say, of their own so-called structural adjustment programs.

Budget cuts were meant to open economies to investment, downsize overstaffed and inefficient governments and encourage the creation of private sector jobs. But they also led to a reduction in public spending on health and education – and economic contraction.

That changed when the IMF permitted more spending on social needs, and international debt relief efforts allowed money once targeted to creditors to be channeled into investments.

Debt forgiveness

Critics say there’s not much hope for growth for Greece – or any other government – without forgiving or restructuring debt. Germany has ruled out writing off Greece’s debt, although the IMF is urging debt relief and some form of investment to spur economic recovery.

Elizabeth Sidiropoulos, the head of South African Institute of International Affairs in Johannesburg, says Africans have learned that policy makers must balance belt-tightening with social justice.

“While in the Greek case a degree of austerity is important and necessary,” she said, “[you have to ask yourself] at what point are the outcomes we were hoping to achieve are actually destroying the very patient, or very country it’s hoping to help?”

“These are issues with African states were tackling when you had IMF prescriptions really weakening state institutions in education, health, etc., that’s now only beginning to right itself in a number of low income countries on the continent,” she said.

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